Taxing the Poor

Steve BucksteinQuickPoint!

Looking for more tax revenue wherever they can find it, some legislators and special interest groups want to raise Oregon’s corporate income tax. But raising corporate taxes will have hidden, yet very real, detrimental effects, especially on Oregon’s poor.

The Tax Foundation recently launched the CompeteUSA campaign to raise public awareness of the ways America’s high business tax rates affect our competitiveness, wages and living standards. The campaign explains that American workers shoulder a disproportionate amount of the corporate tax, and the poorest 20 percent of households pay more in corporate income taxes each year than they pay in individual income taxes. In fact, corporate taxes accounted for 6.3 percent of low-income households’ tax bills last year, compared to just 4 percent for individual income taxes.

This burden occurs because corporate taxes are often simply passed on to consumers and workers in the form of higher prices or lower wages.

The average Oregonian now earns only 90 percent of what the average American earns, which is down from 97 percent ten years ago. We don’t need to enact policies that will tend to push our earning down even further. Even if we wanted to shoot ourselves in the foot, we shouldn’t do it in such a non-transparent way. We should at least tax people openly. We could start by taxing the poor, since that’s what raising corporate taxes likely would do anyway.

Founder and Senior Policy Analyst at Cascade Policy Institute, Steve Buckstein is Director of Cascade’s Government Transparency Project and the Oregon Economic Opportunity Project. Based in Portland, Cascade Policy Institute is Oregon’s free market research center.

© 2008, Cascade Policy Institute. All rights reserved. Permission to reprint in whole or in part is hereby granted, provided the author and Cascade Policy Institute are cited. Contact Cascade at (503) 242-0900 to arrange print or broadcast interviews on this topic. For more topics visit the QuickPoint! archive.

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